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Program built to help home buyers

January 20, 2003|by STACEY DANZUSO

chambersburg@herald-mail.com

CHAMBERSBURG, Pa. - It may sound too good to be true, but with just $1,950, you might be able to own a home.

The Borough of Chambersburg began a first-time home buyer program two years ago with state funding, but so far there has been limited interest in the program that can help buyers of any age purchase their first home.

"The biggest problem is that people don't know about it," said Kathy Rockwell, who oversees the program for the borough.

There are just a few guidelines: The home must be in the Borough of Chambersburg, the house cannot cost more than $65,000, the buyer cannot have owned a home before, the buyer must fall in Section 8 income levels and the buyer must be "credit worthy."

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If an applicant meets the guidelines, the borough will pay 17 percent of the home's value as a down payment, leaving the buyer just 3 percent to pay - about $1,950. The borough also will pay half of the closing costs.

The borough's share of the down payment is considered a deferred loan that homeowners do not have to pay back as long as they live in the house, Borough Planner Gary Norris said.

Once the house is sold, the loan must be repaid.

The borough also helps the applicant secure financing for the remaining 80 percent of the house, Norris said.

Rockwell said most people come in with a house in mind, and Norris inspects it to make sure it meets borough safety codes.

Applicants also must complete a financial counseling class.

"They learn to balance the cost of homes while paying bills so they can be self-sufficient," Rockwell said.

She said the borough has received several applications, but often there are problems with the credit check.

The borough contracts with Financial Counseling Services in Chambersburg to determine if an applicant is "credit worthy," which involves a detailed check into the person's financial history.

The borough started the program two years ago as a way of encouraging home ownership. About 48 percent of borough housing is occupied by renters, Norris said.

The program is funded with a $150,000 grant from the Pennsylvania Department of Community and Economic Development. The fund will replenish itself over time as homebuyers sell their homes and pay back the loan.

The borough has helped four families buy their first home so far.

"It's a marvelous program. There are a lot of single parents, and it is the only way for some to buy a house," said Rockwell, who also encourages senior citizens living in apartments to apply.

If there are no credit problems and the applicant has a home in mind, it will take about three months to get a person into a home, Norris said.

Borough officials support the program because they believe homeowners have a vested interest in the upkeep of their property and the community in general, Norris said.

In order to meet Section 8 income guidelines, a single person must earn no more than $26,650 annually, a two-person household can earn $30,450 or less and a four-person household $38,100 or less.

For more information, contact Rockwell at 717-261-3208 or Norris at 717-261-3232.

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